Google-parent Alphabet’s fourth-quarter cloud-computing revenue rose 30% to $11.95 billion, missing estimates of $12.19 billion. The company forecast capital spending of $75 billion in 2025, exceeding Wall Street’s projection of $59 billion.
Microsoft also reported a slowdown in its Azure cloud computing business due to capacity constraints, which affected revenue growth. The company aims to spend $80 billion on AI infrastructure in fiscal 2025.
Despite the emergence of Chinese startup DeepSeek and increased capital spending by tech companies, market share gains for Microsoft and Google are unlikely. Alphabet acknowledged that its cloud needing more capacity could have implications for AI workload market share.
Analysts note that the deceleration of cloud revenue growth rate due to the timing of when capacity goes live may impact future growth prospects. Meanwhile, Amazon’s AI-related cloud demand remains driven by Meta Platforms, which has developed its Llama family of open-source AI models.
The slowdown in cloud computing market growth highlights the challenges faced by tech giants as they invest heavily in artificial intelligence and expand their data center capacities to meet growing demand.
Source: https://www.investors.com/news/technology/google-stock-amazon-microsoft-cloud-data-center-capacity